Smart Buyers Use a Local Realtor

The trend for many industries over the last few years has been DIY with the help of emerging technologies that ease the burden of what was once hard to do on your own. Real estate is one of those industries that continues to see new competition offering to help you save money by using their application or listening to their podcasts. But are you ahead of the game if you decide to buy or sell a home without the assistance of a realtor?

Let's first get one thing clear. I am not a realtor and I don't play one on TV either. My perspective on this subject comes from a lender which deals with real estate daily. I am close enough to have some ability to discuss this confidently but I believe detached enough to be a voice of reason without an agenda.

When buying a home, the first step is to get pre-approved so that you know what you are able to qualify for. The second step is to connect with a great realtor. Here is why in 15 points:

Important Points to Consider that Show the Value of Your Realtor

1. No Cost to You: The first thing to note is that when you are buying a home the real estate agent that you are using does not cost you any money to use. The way that real estate transactions work is that the seller pays for both the seller's real estate agent and the buyer's real estate agent in the proceeds of the sale of the home. It is hard to beat that.
2. Online Search: This is the fun part of looking at a home. Before even considering talking to a real estate agent many people will jump online to one of the popular sites like Zillow, Trulia, and Redfin and start looking at homes. This is fine for window shopping but when you are ready to be a serious buyer there are some significant problems with this. First, the above companies do not have access to MLS. This is important because MLS is the listing source that properties for sale are put. It is updated by the minute and the information must be accurate to industry standards. These companies get their listing information from third party sources. It is not unheard of for the properties shown to have been sold months previously or have incorrect information. In a hot market, you can also lose out on properties as it takes time for these companies to get the listings and show them. By the time you see it, someone working with an agent may have already put in an offer and have had it accepted. Finally, the property valuations on these sites are often very far off and can mislead you into thinking the fair market value of a property is very different than what it is in reality. A real estate agent, on the other hand, can set you up with an individualized search using Homesnap which is directly tied to MLS. Why waste time with outdated and wrong information?
3. Focus Your Search: As a buyer, you will have some idea of things you must have in a new home and some things you would like to have. A realtor will be knowledgable to help you focus those and give feedback on what the current market in the areas you are interested in looks like. Perhaps inventory is low in one area for what you are searching but a nearby community may have more choices. A realtor would know and be able to redirect your search based on that. Or maybe a particular style of home is often priced higher than a similar style that meets your needs. Again, a good realtor would know and help you consider other options.
4. Viewing Homes: When you want to view homes it is possible to contact a listing agent and ask them to show the home. Most will ask a question along the lines of "Are you working with an Agent?" and if you are not they make look to do a dual agency. This means that the listing agent or agent company is also representing you as the buyer. Though technically they still have a fiduciary responsibility to both seller and buyer it is something I would advise to avoid. After all, as the Bible says, "No one can serve two masters."
5. An Educated Eye in Viewing Homes: Since they view homes all the time as a big part of the time spent in their profession, Realtors know what to look for to signs of issues that would want to be considered even before making an offer. Are there indications that pest, mold, leaks, or structural issues? Does the roof or the appliances look to be near the end of their life expectancies? These may not be things you are familiar with seeing the warning signs but a good Realtor is.
6. Arranging and Coordinating Viewings: I know of Realtors that have taken clients out to see over a dozen homes in one day. As a client, you may not realize that there is a lot of work done ahead of meeting your agent and seeing the homes. Your Realtor is contacting listing agents and making arrangements to see these homes and coordinate it with the expected time for viewing and travel to make it from one viewing to the next.
7. Emotional Stability: The home buying process can be filled with very strong emotions. Both positive and negative. Being that real estate is a business transaction it is important to have someone in your corner that can help anchor you and keep you from getting too high with excitement or too down with frustration. Having a voice of reason that is not as emotionally involved to listen and give advice is very valuable.
8. Experience: We all know that the first time you do something you usually are not very good at it. The more complicated something is the harder it is to do the first time around. A home purchase is a complicated transaction which is why it requires so many people with very specific specialties (Loan Officer, Realtor, Lawyer, Title Rep, Appraiser, Inspector, and more). Even if you have bought several houses before, chances are that you have no gone through the process as many times as a Realtor has. They will know how to navigate the entire process and help you through it.
9. Advocate: A good Realtor is going to be someone who is looking out for your best interests. Now, just like in every industry there will be good and bad professionals with varying degrees of commitment to your best interest. However, if you have a good one then they are an experienced, knowledgable person that is going to fight for you every step of the way.
10. Pricing Guidance: When buying anything, we all want a good deal. When buying a home a good deal vs a bad one means thousands of dollars of difference. You may know how much you can afford but you may not have any idea of how to price out a home for what fair market value is- a Realtor has the training and understanding to have a very good idea of what a property may come in at on an appraisal. That way you can craft your offers based on that guidance. Further, you do not want to end up paying for an appraisal on a property to only be told you are drastically overpaying and either have to renegotiate or walk away with nothing after paying for an appraisal.
11. Avoiding or Solving Potential Problems: Because of their experience Realtors will have gained an understanding of potential issues and either help guide you away from those or know how to solve the problem. One example would be if you are looking to purchase using some loan programs, there may be repairs that would be needed on the property in order for the loan to be approved. A Realtor will often have a good understanding of this and help you decide if it is worth it or if you need to look at other properties.
12. Professional Negotiations: When it is time to put an offer on a house there is often some back and forth on finding mutually agreeable terms for the transaction. This takes negotiation and if you are not used to doing this you could be at a very drastic disadvantage. Realtors negotiate contracts often since it is a big part of their jobs. They know what areas are important and may guide you in asking for things you may not have ever thought of or coming up with a compromise to get an agreement.
13. Contacts: I got a guy for you! I have a great gal who does great work doing that! You may often hear this or similar statements when working with a Realtor. Realtors often have very extensive networks of professionals that they have worked with in the past and can refer you to. Everything from Lenders and Lawyers to Interior Decorators and Contractors and much more! They can be a great resource for you to connect with trustworthy people or companies to help you achieve your goals.
14. Paperwork: There is a lot of paperwork that must be done in the process of buying a home. A Realtor has the experience of doing this and will do all of the prep work for you only having you sign what you need to sign after explaining the documents. Without them, you will have to spend a lot of time understanding everything and likely unsure if you have any mistakes that you have made.
15. Fiduciary Duty: A Realtor has a responsibility to look out for your best interests. This is both by law and by license. Why wouldn't you want someone looking out for you in what is likely the largest financial transaction of your life unless you buy another home later?